Minding The Hen House II: More On Professional Standards For Art And Antiques Appraisers

Last month we discussed The Appraisal Foundation's (TAF) pending Minimum Qualifications Criteria for Personal Property Appraisers. "The Criteria" applies to North American (US and Canadian) appraisers who value a broad range of luxury and investment level art and antiques.

The ensuing questions and comments illustrated a significant divergence in standards and practice across the pond, which proved more interesting than the article, so here's a little follow up. If you missed the original article, which lists the proposedTAF criteria and some analysis and commentary, please find it here:

http://www.art-antiques-design.com/featureDetails.cfm?featureID=837

Comments from our UK friends suggest that formalized professional and ethical criteria for art and antique appraisers are not generally relied upon in the UK or EU. This seems to be based on the more stringent culture of serious vetting for antiques and art dealers, and comments that the profession is more highly regarded generally and internally monitored.

This raises many questions for Americans. Here, increasingly, appraising is earning a place as an independent allied profession to the art and antique dealing trade, with defined qualifications criteria beyond experience and connoisseurship.Here are some highlights of the discussion:

Ethical Standards: Remarks on this issue focused (fairly) on American appraisers who have engaged in egregious ethical conflicts of interest, earning widespread news coverage for their misdeeds, despite formal published ethical standards.

Agreed, abuses occur, and the US courts, both civil and criminal, have been uneven in applying justice to victims. However, TAF guidelines for ethics are well-defined by the Uniform Standards for Professional Appraisal Practice (USPAP) to which all TAF qualified appraisers are bound to adhere. This allows the professional appraisal societies, who sponsor TAF to pick up the ball in censuring appraisers who violate USPAP and removing their credentials.

Are the ethical standards among EU and UK dealers so superior that oversight and formal standards for appraising are not necessary to ensure public trust? I ask this not as a provocative question, but to better understand if there are published ethical standards that apply to antiques and art appraisers, as distinct from dealers, outside TAF.

Educational Requirements: Some comments leaned toward the point that Connoisseurship and significant market experience should produce a credible appraisal result. Agreed, these are critical criteria. Beyond this, report development and reporting criteria under TAF guidelines requires appraisers to be trained and tested in appraisal theory and methodology, various market conditions and effects, and proper markets for the analysis of comparable sales data to the intended use of the appraisal.

A great illustration of the application to this advanced training in practice can be found in the disparate appraisal results reported in the Detroit Institute of Art litigation. One of the appraisers weighed the effects of market absorption (blockage effect), notoriety of the collection, and the most common likely market for accomplished sales. Professional analysis of these factors resulted in a very different conclusion than the original appraisal.

Experience standards: The question was raised as to how the experience requirement in the criteria has been received, specifically the 700 hours of appraisal writing experience required to attain qualified status.

In my experience, most credentialed appraisers feel the appraisal writing experience requirement is relevant. This means that before being accredited, you've researched and developed at least 700 hours of formal appraisals, hopefully under the supervision of an experienced mentor. To put this in perspective, this translates to about one year of half-time work. Hardly an onerous requirement for a meaningful credential.

The experience requirement discussed above, together with the 45 hours of defined appraisal theory and methodology classroom training, 2.5 years (full time) experience trading in the specific property to be appraised, and an additional 80 hours of classroom training in USPAP and in identifying relevant property, seems like a good low bar for minimum requirements for professional appraisers of high-value art and antiques.

Maybe this sounds like a high bar? Understand the goal is to position appraising as an independent profession, promote public trust, and remove as much bias as possible in a murky industry of appraising asset-class property.

I'd like to invite our readers to continue the conversation. Here are a few questions from North American appraisers for our UK and EU friends in order to better understand standards and the need for appraisals outside the Americas. Feel free to pose questions to appraisers writing to the TAF and USPAP standards in the US and Canada as well.

* Are there written ethical standards for appraisals published by your antiques guilds?

* Has the UK or EU distinct appraisal societies that test, train and accredit appraisers?

* Is there a minimum uniform standard for the research, development and reporting of antiques and art appraisals? If so, are the criteria published, and can the public easily access?

* Do you have criteria for valuing property for different purposes? For instance, would you examine the same markets and use the similar comparable sales for an estate tax appraisal as for an appraisal to obtain insurance coverage?

* Are formal written appraisal reports for insurance coverage for high-value art and antiques commonplace?

* Are there formal standards for tax purposes similar to the IRS Qualified Appraiser and Qualified Appraisal regulations in the US?